Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

Mark Carney will show up at a parliamentary committee meeting this week in London to face some tough questions about why he wants to be governor of the Bank of England for just five years instead of eight and why he thinks central banks should move away from inflation targets.

MICHAEL BUHOLZER/REUTERS

Mark Carney will show up at a parliamentary committee meeting this week in London to face some tough questions about why he wants to be governor of the Bank of England for just five years instead of eight and why he thinks central banks should move away from inflation targets.

Mr. Carney's appearance before the House of Commons Treasury Committee on Thursday morning will be his first taste of what life will be like as governor, a position he formally takes up July 1.

The Treasury Committee is among the more powerful committees in Britain's Parliament and it recently won the power to interview the incoming governor before he takes office. Although it doesn't have the ability to block Mr. Carney's appointment, the committee could make it difficult by issuing a negative report to the House of Commons and forcing a vote on whether he should be appointed.

Story continues below advertisement

No one is expecting that to happen, or the committee to give Mr. Carney a particularly rough ride on Thursday. "This is an opportunity for the new governor to get to know the committee," member Andrew Love, a Labour MP, said in an interview. "It's important for us to get to know him. And it's an opportunity for the British public to find out more about how he sees the job as governor of the Bank of England."

But it won't all be easy going. Committee chairman Andrew Tyrie, a Conservative MP, has made it clear he has reservations about the recently expanded role of the governor, which now includes a supervisory role over London's financial district along with setting monetary policy. Mr. Tyrie and other committee members have called for more oversight of the central bank, given its additional responsibilities. "We will want to hear what [Mr. Carney] has to say about making sure the bank is equal to the challenge of these new responsibilities," Mr. Love said.

Mr. Carney will also be grilled about his decision to take the post for five years, instead of the eight requested by the British government. Mr. Carney told The Globe and Mail in November that he wanted the shorter term for family reasons and because it matches his potential tenure as head of the global watchdog known as the Financial Stability Board. Mr. Love said he and other committee members will need more of an explanation.

Merging the new responsibilities won't be easy and it is hard to see how that can be done quickly, the MP added. "He certainly comes well qualified but there's a major challenge and we will want to hear from him why he believes he can achieve that in five years."

There will also be plenty of questions about Mr. Carney's recent statements about whether central banks should scrap inflation targets during extraordinary times and move to a target that includes nominal gross domestic product, or GDP that has not been adjusted for inflation. Economists say targeting to nominal GDP growth would allow for higher inflation when the economy is slow, and lower inflation when the economy is strong. The idea is to try to smooth out the boom-and-bust cycles with an expanded approach, rather than fixating on a specific inflation number.

That kind of change would mark a major shift in policy for the Bank of England, which has followed a strict policy of targeting inflation at 2 per cent. Even the man who appointed Mr. Carney, George Osborne, the Chancellor of the Exchequer, has expressed little interest in the idea, saying inflation targeting has served Britain well. During a speech at the recent World Economic Forum in Davos, Switzerland, Mr. Carney also mused about using "unconventional measures" to kickstart an ailing economy.

Those comments have been given front-page treatment in Britain and will make up a large part of Thursday's hearing. "We hope that he will lay out in some detail how he sees [nominal GDP targeting] developing and where he sees us moving," Mr. Love said.

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies